House FY12 Budget Proposal Lowers Taxes for Wealthy While Cutting Federal Workforce, Freezing Pay

(National Federation of Federal Employees)

On Tuesday April 5, 2011, House Budget Committee Chairman Paul Ryan (R-WI) unveiled his budget proposal for fiscal year 2012, titled “Path to Prosperity.” Following in the footsteps of his home state’s Governor, Scott Walker, Rep. Ryan’s budget includes more misguided attacks on federal employees in a disingenuous attempt to reduce the federal deficit. While proposing tax cuts for the richest Americans – like himself and the majority of his congressional colleagues – Ryan hopes to pay for it through massive reductions in the federal workforce and federal pay.

This proposal is not only unfair, but it is bad policy. In Mr. Ryan’s own words, he proposes that “by 2014, this reform would result in a 10 percent reduction in the federal workforce.” His solution for 8.9% unemployment is to cut 200,000 jobs. He proposes that the federal government reduce the workforce across every agency by hiring only two new employees for every three retirees, adding to the burden already faced by severely understaffed federal agencies.

Though broad-based workforce reductions may sound fiscally responsible in theory, in practice they have a much more sobering reality. This proposal means hiring two doctors and nurses caring for our veterans for every three lost; two border patrol agents fighting drug and human trafficking for every three lost; two wildland firefighters saving homes and business out West for every three lost; and two passport workers who prevent international criminals and terrorists from entering our country for every three lost. These workers provide essential services to the improvement of our nation, and Mr. Ryan’s arbitrary attrition proposal would severely hamstring the federal government from providing these essential services.

In addition to reducing an already overburdened federal workforce, the proposal aims to freeze federal pay through 2015. Precisely at a time when middle class families need stable incomes to keep their families heads above water, Ryan proposes to reduce the income of over two million hardworking federal employees. Freezing federal pay will make it extremely difficult to recruit and retain a talented and capable federal workforce.  Federal agencies simply will not be able to compete with private sector firms that pay workers much more.

Mr. Ryan attempts to justify this with claims that federal employees are overcompensated compared to the private sector and therefore need to be brought down to private sector levels. In reality, bringing federal pay and benefit practices in line with the private sector would in fact require a hefty pay increase for federal workers.  As if the current public-private pay gap of 23% was not bad enough, this proposal aims to cut federal employee pay even more. Taking inflation, rising health costs, and plummeting home values into consideration, a prolonged pay freeze would amount to an enormous pay cut.

This means that Congressman Ryan hopes to cut taxes for America’s richest, which increases their available income, while cutting pay for America’s middle class federal workers. In addition to being unfair, this is simply bad economic policy. Research points to the fact that the best economic stimulus occurs when middle and low income families have more dispensable income, not less.

“This budget is more than an attack on federal workers and their families – it’s an attack on the critical services that the American people have come to count on,” said NFFE National President William Dougan. “This budget would arbitrarily reduce the federal workforce, cut pay in the face of recession, and severely hamstring the federal government’s ability to perform its duties. I am hard pressed to see how any path to prosperity begins by slashing federal pay and the critical services that the American people rely on.”